INTERNATIONAL INTEREST IN SA STILL STRONG

INTERNATIONAL INTEREST IN SA STILL STRONG

INTERNATIONAL INTEREST IN SA STILL STRONG2018-10-312018-11-02/wp-content/uploads/2018/03/dla-logo_b.pngDeal Leadershttp://www.dlafrica.co.za/wp-content/uploads/2018/10/joao-silas-72562-unsplash.jpg200px200px

Are international acquirers still investing in South Africa? I am asked this question regularly by clients and local acquirers alike. In my own experience, the number of M&A transactions that took place in 2017 and early 2018, as compared that number to recent years, showed a definite slowdown in international interest. According to PitchBook, the ratio of international acquisitions as a percentage of total transactions has, in fact, increased – despite the number of total transactions decreasing (2018: 35%; 2017: 33%; 2016:31% – Source PitchBook.com).

These statistics are almost counter-intuitive to what we would expect from international markets. There is still definite interest in limited industries, but these are not converting into transactions, as they did in 2015 to 2016. But it isn’t all bad news.

Signs of recovery are now appearing. However, the risks to investors still seem to be outweighing the benefits, in the eyes of the international investor market.

Last year was pedestrian, with 2017 seeing about US$2.7 trillion in mergers and acquisition (M&A) globally, according to Bloomberg. All eyes are on a recovery in the remainder of 2018. However, the foreign investment perception of South Africa is key to whether this recovery will be felt in the country.

According to Baker McKenzie, “Investor reluctance is not just about government corruption. The Steinhoff narrative has put South Africa in the spotlight and raised concerns about governance in the private sector as well.”

“Furthermore,” McKenzie added, “Economic concerns, the threat of another credit rating downgrade, issues around service delivery, as well as the fact that South Africa is close to its next election, means that investors are also holding back, adopting a ‘wait and see’ approach. There are also two major political issues causing uncertainty and affecting investment confidence and appetite – land reform and national health insurance.”

Against that backdrop, Reuters reports that in the first half of 2018, 135 M&A deals were signed, with a combined value of US$3.2 billion. The industrial sector was the front runner with 22% of the deal done by volume and a dominant 91% of deals by value.

Data from Bureau van Dijk differs markedly from the Reuters data. Van Dijk recorded 189 M&A deals related to South African-based companies in the first half of 2018, with a total value of US$12 billion. These statistics do not necessarily reflect complete or total acquisitions because Van Dijk includes all company transactions, such as JP Morgan increasing its stake in the Mr Price Group from 4% to 6%.

The flow of private-equity deals saw 50 deals carried out, according to the Southern African Venture Capital Association (SAVCA). It is likely that these numbers were higher, as smaller deals are less likely to be reported than larger, high-profile deals, SAVCA noted.

Of the disclosed deals, 56% were below the R100 million level, 22% were between R100 million and R500 million and the remaining 22% were between R500 million and R1 billion. Analysing the level of shareholding acquired in these deals often offers interesting insights but, unfortunately, in more than half of the publicly disclosed deals, no details on the shareholding acquired were disclosed. Where the acquisition shareholding was disclosed, approximately 39% of deals were for minority stakes, 28% for a significant minority stake (between 25% and 50%), with the remaining 33% for shareholdings of 51% or higher.

The most popular sectors for private-equity investments in South Africa during 2017 were telecommunications and technology, retail and financial services, SAVCA reported. Baker McKenzie’s Global Transaction Forecast (in association with Oxford Economics) expects M&A activity in the technology and telecommunication sectors in Africa and the Middle East to increase almost fivefold in 2018 versus 2017. It expects US$5.9 billion of deal value in 2018 in the region, versus US$1.2 billion in 2017, with an additional US$5.9 billion expected in 2019.

Over the past 12 months, transactions in the industrial sector represented the highest number of cross-border inbound deals in South Africa in terms of both number (22%) and value (91%). According to Baker McKenzie, there were eight inbound transactions in the industrial sector in the first half of 2018, worth an estimated US$362 million. The South African industrials sector is attractive to international investment as it is well established and has managed to stay the course despite a challenging environment.

Inbound investments are still proving to be a good entry point into African economies, as this sector is a focus area for many developing economies across the continent.

LERATO PHALANE

Front of House

As Front of House at Deal Leaders Africa, my key responsibilities are efficient management of front of house, assisting with travel bookings, data processing and any ad hoc requests.

Since graduating in May 2018 with a Diploma in Public Relations, my skill set has grown from strength to strength through day-to-day learnings. Each day, I make use of the new challenges and opportunities I encounter to learn, develop and contribute to the organisation.

SARAH QUIDING

Finance and Administration Manager

Since graduating with a Bachelor of Commerce degree in Economics and Business Economics, I have focused on developing my core skill set and enjoyed a career in project management, software development, marketing and event management.

The foundation of my business acumen was built during the time I spent working in London at the BBC, Barclays Bank and Marks & Spencer’s as a Business Analyst. On my return to South Africa, I spent time working in systems development at Rand Merchant Bank.

As Finance and Administration Manager at Deal Leaders Africa, my key responsibility is to ensure the smooth functioning of the office. This includes finances, compliance, general admin and office culture. I am a highly organised individual, who is passionate about getting any task set in front of me done.

LORNA PATERSON

New Business Initiatives Assistant

I trained as a legal secretary and started my career with a stint in banking before taking on marketing roles in logistics and then in education. I diversified in the education sector, completing courses in communication, training and management and attained accreditation as an assessor and moderator. I spent 15 years working as an independent facilitator, assessor, moderator and learnership coordinator on behalf of training providers servicing large corporate clients.

As a dedicated and organised team player I have gained skills at building relationships across all levels through my ability to communicate effectively and efficiently. My career activities have always been centred around my passion for people and my greatest satisfaction comes from connecting with and helping others.

My role as New Business Initiatives Assistant at DLA allows me to connect and collaborate with diverse individuals on a daily basis. I am committed to making a positive difference and enhancing the lives of those I come into contact with.

JARED MICHELOW

Deal Team Assistant

From a young age, I’ve had a keen interest in business and entrepreneurship. I’ve been involved in a few business ventures of my own, which have taught me invaluable life lessons and skills. This has contributed to my personal growth and awoken my desire to gain even more knowledge and experience in these fields.

To expand my pool of knowledge, I obtained a Bachelor of Commerce degree, majoring in Finance & Investment and Marketing. I later obtained my Honours in Corporate Finance (Wits).

As a Deal Team Assistant at Deal Leaders Africa, I use my training and skills daily to assist in building relationships and communicating effectively with clients. My role also entails facilitating efficient interaction between DLA’s various departments, to ensure smooth and successful business transactions.

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YOUR QUESTIONS ANSWERED

WHAT TYPE OR SIZE OF FIRM SHOULD ATTEND?
If you are a business owner or shareholder of a privately owned company with an annual turnover of R30 million or above.

I’M NOT CURRENTLY INTERESTED IN SELLING MY BUSINESS SHOULD I STILL ATTEND?
Whether you are seriously considering a sale now, looking at a possible sale in the next five years, or are simply curious about the value of your business, you will find the masterclass useful. You’ll leave knowing exactly how to determine your company’s value and with the essential keys to achieving the best price, whenever you choose to sell.

WILL MY COMPANY NAME BE KEPT CONFIDENTIAL?
Deal Leaders Africa takes confidentiality very seriously. There are no name badges and no delegate lists on the day. At no time will your company name or your full name be mentioned.

SHOULD I BRING OTHER SHAREHOLDERS?
We do encourage all shareholders or business partners to attend if possible, as everyone involved in making the decision to sell will find the information beneficial.

IS THIS MASTERCLASS A DEAL LEADERS AFRICA SALES PITCH?
Absolutely not – it is understandable for delegates to be uncomfortable with the thought of being ‘sold to’ on the day, but you can rest assured that there will be no sales pressure exerted during the presentation. We will provide opportunities for a follow up to those who express an interest.

WILL THERE BE AN OPPORTUNITY TO SPEAK PERSONALLY WITH THE PRESENTERS?
Yes. The Deal Leaders presenters will be available to answer any questions before, during the break, and at the end of the event. Please feel free to approach them with your questions.

WILL I BE REQUIRED TO PARTICIPATE IN ANY GROUP WORK OR EXERCISES?
No. There will be no group work at any stage of the masterclass. You will enjoy an inspirational, informative and motivating presentation from world-class, experienced presenters.

WHAT EXPERIENCE DOES DEAL LEADERS AFRICA HAVE?
Your presenters, Andrew Bahlmann and Rick Grantham, have extensive experience in the sale of privately owned companies, having been involved in sell-side advisory businesses for the past 5 years. This is combined with a close and longstanding relationship with BCMS Corporate, based in the UK, who have 27 years experience in this field.

ANDREW BAHLMANN CA(SA).

Managing Director – Deal Leaders Africa

Andrew was thrown into the entrepreneurial world at an early age and experienced the ultimate baptism of fire. He learned at a young age that everything in business revolves around relationships, sales and integrity. He ran his own travel business for six years, whilst completing a CA degree (part-time) and articles in three years.

He then followed the traditional corporate route. Based in New York, he was responsible for an insurance client’s operations in Bermuda and their US short-term and life insurance portfolios. Andrew then returned to South Africa to take up the position as CFO in WesBank’s Corporate Division. It was an incredible learning curve and a successful tenure that oversaw implementation of profitability and aligned remuneration structures, yielding positive growth for the Corporate and Motor Divisions. He learned the fundamental dynamics of how large companies invest and grow through negotiation and acquisition. He contributed to growing the balance sheet to R114bn over his 5 years, and then decided to follow his passion to develop and build businesses.

Andrew’s consultancy, IntelStrat, focused on fostering what he refers to as ‘entrepreneurial DNA’ in the corporate sphere (coining the term Corpreneur). His biggest insight during this time was understanding around what truly creates value in a business. Crossing paths with BCMS – the largest facilitator of the sale of private companies in the world – created the opportunity for Andrew to combine his learnings over the years.

The experience on both sides of the Mergers & Acquisitions table has allowed Andrew to authentically connect with seller and acquirer alike. Many of the local and international entrepreneurs he has engaged with have kept his passion for building businesses alive!

As a deal leader, shareholder and director at Deal Leaders Africa, every day reveals exciting new challenges.

RICK GRANTHAM

Executive – Deal Leaders Africa

Rick studied Mechanical Engineering and spent a number of years running large production operations for various corporates. Following his MBA in 1998 he did a stint in banking before commencing his entrepreneurial journey. Having owned businesses in the media, broadcasting and consulting space, he started a sell-side advisory business in 2012.

Rick’s engineering and manufacturing experience provides him with an excellent base for understanding businesses in the industrial space. His MBA and subsequent work with a US credit card bank, Capital One, and Nedbank, expanded this experience into the financial sector and gave him significant insights into the relationship between marketing and credit risk.

Rick’s first step towards his entrepreneurial journey was to move out of the corporate world to run an educational television business delivering video-based training to the Ethiopian government. This introduced Rick to his first business acquisition, a TV broadcaster and production company. After 5 years Rick exited the business and started a growth consulting business assisting small businesses with their growth strategies. In partnership with one of his clients he built a sell-side advisor business which delivered incredible success in the sale of privately owned businesses.

Rick brings his broad business and operational experience, supported by hands on Mergers & Acquisition transactional track record, to a well-resourced and powerful team at Deal Leaders Africa.

PROGRAMME OF EVENTS

15:30 – 16:00

Registration

16:00 – 16:15

Guests seated – Welcome by Caren Rennie of Deal Leaders Africa

16:15 – 17:15

Part I – TBC

17:15 – 17:30

Break

17:30 – 18:15

Part II -TBC

18:15 – 18:30

TBC

NAKEDI MALETE

Deal Team Assistant

As Deal Team Assistant at Deal Leaders Africa, I assist various departments and fulfil numerous responsibilities that include administration, prospect engagement and attending to ad hoc requirements. I make use of the new challenges and opportunities I encounter every day to learn, develop and contribute to the organisation.

Prior to working at Deal Leaders, I was chosen to represent Rosebank College as a Brand Ambassador. I joined the student council, which afforded me the ability to develop communication and leadership skills.

I have an affinity for learning and recently completed a Diploma in Journalism. I’m continuing to further my education by studying Africa and International Trade through UNISA.

TSHEGOFATSO MODISE

Research Assistant

As Research Assistant at Deal Leaders Africa, my key responsibilities include research support, prospect engagement and liaising between the deal team and prospective acquires.

My career journey includes working as a Junior Research Intern at MAS. There I conducted extensive qualitative and quantitative research into skills development and training policies in South Africa, with a focus on Higher Education and Training. In the process I developed sound critical and analytical skills. I have also served as a Real Estate Agent at Yellow Properties Real Estate in Rustenburg, where I was called upon to evaluate market conditions for clients and to mediate negotiations and legal processes, with the aim of securing fair and honest deals for my clients.

I discovered my interest in research while completing a Bachelor of Social Sciences Honours degree in International Relations through the University of South Africa. Through my education and practical experience I have acquired extensive knowledge in the area of social sciences research methodologies.

GARETH JONES

Research Analyst

My Bachelor of Arts degree in Modern History and International Relations from the University of Wales and my Master of Science degree in Globalisation and Development from the University of London have given me a thorough understanding of the relational component of commerce.

This foundation served me well during the six years when I served as a research analyst for a non-proﬁt organisation. There, I conducted research on a variety of topics, including agri-business value chains, biotechnology and the fertiliser and agri-chemical markets.

Having enriched my knowledge with practical experience, I then moved into the mergers and acquisitions space, where, after working as a research analyst for a year at one firm, I joined Deal Leaders Africa. Here, my primary focus is on identifying and initiating relationships with potential acquirers and investors.

RICK GRANTHAM

Executive

After graduating with a degree in Mechanical Engineering, I spent a number of years running large production operations for various corporates. I obtained an MBA in 1998, then did a stint in banking before embarking on my entrepreneurial journey.

My initial step in this direction saw me running an educational television business that delivered video-based training to the Ethiopian government. This led me to make my ﬁrst business acquisition, a TV broadcaster and production company. After five years I exited that business and founded a consultancy that assisted small businesses with developing and implementing their growth strategies. The knowledge and experience I had accrued up to that point enabled me to start a sell-side advisory business in 2012, in partnership with one of my clients. We developed a reputation for delivering incredible success in the sale of privately owned businesses.

My experience in engineering and manufacturing has given me an excellent base for understanding businesses in the industrial space. My MBA and subsequent work with US credit card bank, Capital One, as well as with Nedbank have expanded this experience into the financial sector and given me significant insights into the relationship between marketing and credit risk.

The broad scope of my business and operational experience, supported by my hands-on involvement in mergers and acquisition transactions have contributed significantly to my ongoing track record of success at Deal Leaders Africa.

ANDREW BAHLMANN CA(SA)

Managing Director

My business career began the year after I graduated from high school, when I started and ran my own company. Six years later, I qualified as a Chartered Accountant and sold the business. I then spent a year in New York managing a large South African insurer’s operations in Bermuda.

After that I returned to South Africa to take up the position of Chief Financial Officer of WesBank’s Corporate Division. There I oversaw the implementation of enhanced profitability structures, which yielded positive growth for the Corporate, Fleet and Motor Divisions and contributed to a R114 billion balance sheet. This role took me along an incredible learning curve, where I developed an understanding of the dynamics involved when large companies invest and grow through negotiation and acquisition. Having completed numerous successful acquisitions and disposals of businesses and working alongside some of the largest international motor manufacturers like Toyota, VW and General Motors, my exposure to the international mergers and acquisitions market has proven to be invaluable in my current role.

I left Wesbank to launch my own consultancy, IntelStrat, which fostered the development of ‘entrepreneurial DNA’ within both large corporations and SMEs. The biggest insight I gained there was identifying and understanding the areas that business owners need to focus on to maximise the value of their businesses.

Through my involvement in the extensive international networks I have built over the past few years, I’ve found that my experience on both sides of the table has allowed me to form authentic connections with both clients and acquirers alike.

As a Shareholder, Director and the Head Deal Advisor at Deal Leaders Africa, I have concluded a significant number of successful transactions across multiple industries and countries.

LAUREN RAMAN

Graphic Designer

Backed by a National Diploma in Graphic Design from the University of Johannesburg, my work experience includes roles within both design agencies and corporate entities.

One of the agencies I worked for was global management consulting and professional services firm, Accenture, where I provided the graphic design components of marketing campaigns for leading South African companies.

I channel my creative ﬂair and passion for stand-out design to produce client marketing documents that simultaneously invoke a sense of the unique nature of each client’s business and present the business in its best light.

ALEXANDRA CRELLIN

Business Intelligence

I entered the mergers and acquisitions arena in 2014 and experienced rapid growth in my career journey, working on over twenty-five M&A projects which involved dealing closely with clients, their businesses and prospective acquirers. Through exposure to industry pioneers and working with highly skilled individuals, I have built up an exceptional databank of knowledge and key learnings.

During my career, I have developed a passion for ensuring that good governance is exercised and that data is effectively managed to create useful dashboards and reports for key decision making.

ANDRIES LOUW

Deal Team Analyst

As a Deal Team Analyst, I play key roles in managing project life cycles, providing financial and valuation analysis, liaising with clients, project management and acquirer interaction. I began my career in the Financial Services industry during 2012, after completing my undergraduate degree in Investment Management.

While working for some of South Africa’s major banks and insurance companies, I gained valuable insight into business in Africa, as well as into numerous local industries. Through my roles as Credit and Financial Analyst, I honed my skills as an analyst. This experience is part of what informs the articles I currently write on the latest developments in the South African economy.

I am currently studying towards an MBA at Wits Business School.

KIMBERLEY RAAD

New Business Initiatives

I developed my competency in facilitating new business initiatives at Citadel Wealth by working closely with the head of the team. Together, we achieved inflows of more than half a billion rand in the our most successful year.

My business acumen has also been enhanced during my prior pursuits, which include working in property management in New York City, running a catering and events company and co-managing a chain of restaurants in South Africa.

Trevor Mabaso

Deal Team Analyst

Prior to joining Deal Leaders Africa, I held a role as a Junior Finance Analyst in the acquisitions team at EOH. There, I was responsible for assisting in financial analysis, conducting due diligences, company performance management, valuations and some financial reporting. This piqued my interest in mergers and acquisitions while also bridging the gap between theory and practical work, thereby endowing me with valuable skills and experience.

Joining Deal Leaders Africa was a strategic move that turned into a golden opportunity, as I always look forward to learning and taking on new challenges. Obtaining a postgraduate diploma in Financial Markets also taught me skills relevant to the corporate finance field, specifically in financial analysis, financial modelling, valuation and investment management.

CAREN RENNIE

New Business Initiatives

My career has endowed me with an incredible amount of in-depth experience in helping companies to realise their growth potential. A great deal of this stems from the 18 years I spent as a Partner at Citadel Wealth Management.

My marketing roles at a London-based recruitment agency, a public relations agency and one of South Africa’s largest shopping centres contributed additional dimensions of experience.

My passion for business growth means that I naturally focus on this area, which led me to secure unprecedented financial inflows to Citadel. One of the keys to my success in that regard was initiating a strategy to tap into the female segment of the market. I won company awards on several occasions for that achievement and others like it.

NICHOLAS DUNN

Deal Team Analyst

Obtaining my Master’s degree in Commerce provided me with a broad base of knowledge to complement my flair for interpreting data and communicating the findings in a manner that produces optimal outcomes.

I was previously a Private Equity Analyst at Grindrod Bank. In that role I amassed experience in the structuring of equity, debt and preference share transactions across a wide variety of industries.

My responsibilities there included the presentation of deals to the deal team, financial modeling, due diligence report writing and assisting in the coordination of legal documents. The experience I’ve gained enables me to interpret trends that can be factored in to enhance the structuring of deals.

TAMRYN HARTOGH

Deal Team Analyst

My training and experience have produced in me a firm belief in the potential of private equity and mergers and acquisitions to drive significant economic growth in South Africa.

After completing my MBA at Gordon Institute of Business Science in 2016, I entered the field of private equity as a senior associate in South Africa’s first dedicated distressed investing firm. There I accrued invaluable experience in identifying and unlocking value through deal sourcing and valuations, distressed turnarounds and company restructuring.

Prior to completing my MBA, I headed up the Research, Policy and Strategy division at B&M Analysts, a specialist consulting firm in the areas of industrial policy and manufacturing firm competitiveness. This afforded me the opportunity to contribute toward the development of the government’s current incentive policies for South Africa’s automotive and clothing and textile industries.

This experience provided me with unique insights into the intersection between macro- and microeconomic factors influencing company performance, through my involvement in developing innovative solutions for companies, industries and governments worldwide.

NATHAN COETZEE CA(SA)

Deal Lead Advisor

Since qualifying as a Chartered Accountant, I have dedicated the majority of my career to honing the skills and insights needed by those in deal leading roles to produce optimal outcomes and exceed clients’ expectations.

Before joining Deal Leaders Africa, I held a similar position in the investment banking and corporate ﬁnance world, at Barclays Investment Bank in Johannesburg.

I’ve gained extensive knowledge of both transaction negotiation and deal structuring, having been involved in deals across multiple sectors in South Africa, sub-Saharan Africa and further abroad.

A particular strength of mine is my ability to assist companies in making strategic shifts in direction and critical business decisions. This has resulted in sustained profitability for the companies I’ve worked with.